Major banks eyeing move to Paris, claims French regulator

Various “large international banks” in London are reported to be in the late stages of planning to relocate at least some of their operations to Paris, according to a member of the French financial regulator AMF.

City of London financial banks
Some "large international banks" banks based in London are in the advanced stages of planning to relocate at least part of their operations to Paris, according to Benoit de Juvigny, secretary general of the French financial regulator Autorité des Marchés Financiers (AMF).He also told the BBC Newsnight programme that, because of concerns that a post-Brexit UK could lose the passporting rights that enable the financial sector to trade freely throughout Europe, "many other" British companies had made informal inquiries about moving across the Channel. "In some cases I would say we are still at the level of inquiries or informal inquiries by consultants, by lawyers and so on," Mr de Juvigny said. "But in other cases, especially regarding large international banks, it's a normal informal inquiry but they have been undertaking due diligence, and we are receiving lots of practical questions regarding the way they are going to be managed from our perspective, from their relationship with the French regulators." Nicolas Mackel, the head of Luxembourg for Finance, has already claimed that London financial institutions were eyeing moves to Luxembourg while Frankfurt, Dublin, Amsterdam, Milan and Madrid are among other cities making overtures towards London-based financial services companies.

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A recent analysis by Morgan Stanley showed that both Paris and Frankfurt would be more expensive environments than London for US banks, mainly because of higher labour costs, but Anthony Browne, the head of the British Bankers' Association, has conceded that many institutions had begun contingency planning in case the UK loses passporting rights although few believe that, even if that happens, London will lose its role as a global financial centre.Mr de Juvigny also expressed concerns that regulators in different countries competing to attract London businesses could become involved in a race to the bottom for banking legislation. "The danger is the race that we could have for a more lenient regulation with a more lenient regulator," he said. "It's a dangerous challenge...we could see some kind of new competition between countries, between regulators."He said the risk of such leniency was lax regulation that could lead to another financial crisis, and called for Europe to stick "strictly" to existing legislation and not to make special arrangements to accommodate the UK. "I don't believe that (lenient regulation) should be the choice of the UK, but nobody knows," he said.

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